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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.

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Us 35, Sears 19, Dell 14, Washington 11, Carl 11, Europe 10, Boehner 8, America 7, John Harwood 6, Apple 6, Rick Santelli 6, Cisco 4, Starbucks 4, Geico 4, Nike 4, Harry Reid 4, Jim 4, Ho 4, Kent Conrad 4, Italy 4,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl Quintanilla,  
   David Faber. Opening bell market action. New.  

    November 16, 2012
    9:00 - 12:00pm EST  

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>> you want to rise above this. >> i'm rising above. >> all right. now we see. thank you for rising above. have a great weekend. see you on monday. "squawk on the street" begins right now. president obama has already met with labor leaders, progressives and a dozen ceos but this morning he holds a meeting with congressional leaders on avoiding a fiscal cliff. wall street wants to know if they can strike a deal. welcome to "squawk on the street" i'm ellitel melissa lee. carl quintanilla is at the white house this morning. good morning. >> good morning. as you mention, melissa, an amazing week of meeting at the white house. none of them really matter when you put them up against the meeting that's about to happen in this building in an hour from now. speaker boehner, senator mcconnell, senator reid, democratic leader pelosi, all
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will come here and speak for a couple hours. day one of negotiations. nobody is expecting huge news but as jim has already tweeted out this morning, the market is going to look for signs that this tone of compromise that we've heard so much about all week long is that for real or are talks going to break down in early stages? the market specifically is going to depend on that tone today and we'll bring that live when the meeting happens a little after 10:00 a.m. >> we've seen reaction of futures to the possibility of a deal. we've been down for six of the past seven days but the dow this morning implied open is up 33 points. sapp looks s&p looks to add fiv. here we have italy down three-quarter percent and mixed bag for the rest. carl? okay. we're going to go to the road map this morning. that is where carl is in washington d.c. reports this morning that hard
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decisions surrounding deficit reduction could be kicked down the road until 2013 in favor of a smaller package of tax increases and spending cuts. >> what does that mean for the markets? already since the elections the s&p has lost more than $600 billion in market cap. we've got stocks down six of the last seven sessions. >> a tale of two retailers this morning. gap continues to show signs of a turnaround posting earnings at top estimates and raising guidance. sears holdings slumps on its earnings miss. wi at 10:15 eastern, president obama will host senate and house leaders to discuss ways to solve the fiscal cliff. sources telling t"the wall stret journa journal", white house are in advance internal discussions to replace sweeping spending cuts set to begin in january with a smaller separate package of targeted spending cuts and tax increases and this certainly changes the story entirely in terms of what we're looking at over the next few weeks if this is true? >> why is that? >> we are just going to live
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with uncertainty until 2013. if we have a smaller package and we kick the can down the road so to speak to 2013, we don't have any clarity. >> i'm saying that this morning we've got -- >> i see. >> we have this kind of plan. this is a 1990 playbook here. i know it's an old playbook. that was iraq/kuwait. every friday there was a short covering rally because there was a belief that over the weekend there would be some agreement. i'm not saying that this is saddam versus president bush. if you go over that period, it's relevant. you hear maybe there's a deal. we had multiple moves on friday from 3,000 to 2,300 and back to 2,600 on the dow on percentage bases are important. they all started like this. they would float something really good. and really good meaning it would avoid the cliff in this case or mean a rapid pullback from kuwait.
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a lot of short covering because shorts have done a magnificent job. made a lot of money. 8% decline from the top. what we're stuck with is a world where the shorts cover and it looks like this might be a deal and there's huge disappointment and that's how you have up friday, down monday. >> like what we saw with europe. you go into the weekend worried something will fall apart in greece and then there may be relief on monday. are you a proponent of the theory they can say something positive enough where we reverse some of the pain from this week? >> i think the process will be played out -- there will be people like the republican from idaho saying his job is to stop us from rising above. he's saying that rise above thing, this is the way i read it. cnbc is doing it and it's nonsense. what's important is to stop anybody who might go for
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compromise. these people shoot down what happens today and they make anybody who was fooled into buying realize it was a thing that was floated and didn't work. anything can happen. i want to caution people that there are going to be many moments where it seems like there's a deal and people fight the deal which is why we have featured the notion of rising above. the fighters have to give way. >> carl, i do think it's important in terms of what we're hearing from the journal to start thinking -- i mentioned this yesterday. i don't have sources that journal has in washington but i did have a couple conversations with senior business leaders who at least seemed to be aware of the policy making choices that were coming. this idea that we'll find ourselves moving this debate into next year, there may be some sort of package of smaller spending cuts, excuse me, in terms of pushing off
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sequestration but we have to extend the tax cuts for some small period of time. we'll see whether that starts to enter the mainstream conversation at this point, carl, and perhaps you'll pick things up today when you're down in d.c. about that. that of course, jim, moved things every day it will be like this. >> carl mentioned jim cramer on twitter. >> it hit at 3:30 in morning. >> this is a crisis. i'm trying to get my arms around it every day figuring out what the analogs are and help people with this stuff as you are and everyone is. i come back to say we're so oversold that any news would be a better time to sell if you don't believe in washington and would be a reason to hold on. you have to have a view. you have to have a view about whether there's possibility if people will rise above and compromise. everyone is stymied about the idea that they feel pressure. carl, do they feel pressured? do you see anyone or hear anyone that says i was against
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compromise. there's so much pressure going on, i am more pro-compromise. >>ive not heard that publicly. you know the difference so well about what's being said publicly. there are traders, i'm sure you are aware, who think there's a deal that's basically cut but that both sides are trying to get respective parties in a position to digest it. that's how wide the expectation is on this thing. >> there are hedge fund managers who i have spoke to even today saying i'm ignoring most of this and i'm not pulling back really. i'm just focused on trying to figure out what to do in this environment like i would be in any which brings us to the stock market. already sending a message to washington perhaps about the necessity of a deal on the fiscal cliff. six out of the last seven sessions have been negative. down more than 5% on fears about it but you've been bringing up
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the market action similarity to a certain extent to 20 plus years ago. a year ago let's not forget we were starting to deal with europe. it did not end until we got ltro, long-term refinancing operations from ecb that said we're going to -- it's not going to go bankrupt today. that's when we were watching italy above 7%. today those ten-year yields up 4.5, 4.6. >> talk about how italy has come. the economy is better than other countries. northern part of italy is increasing industrial production. that's impressive. they never gave up. italian banks some are happy with no problems funding. the reason i go back which is of the analogy why i go back that far. that's a tuesday, wednesday thing in europe. you focus on when ecb meets. here it's the belief they'll have secret sessions. something is going to happen that's truly remarkable. and then when you don't have it, you come in on monday and say
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what were we thinking? what were they thinking? that's what i here. >> the upside to any mini deal on fiscal cliff is there is some clarity surrounding tax policy. what kind of cuts will we have? what kind of tax increases will we have when it comes to capital gains and dividends and that will alleviate pressures on the market or give investors a clear road map on why they are selling and what they should sell and when they should sell in terms of a time frame if there's a silver lining. >> at this point a bad known is better than any unknown. it allows executives to plan. tax planners to recommend ideas. allows people at home to say i see i have to sell apple and i'll sell a & d and net the gain and protect myself. these are things that would lead to more rationale market where people might be opportunistic. right now there's no reason to be opportunistic.
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deere was on today. sure enough, what does the executive say from the ceo? i got to cut back. i got to cut back because of the fiscal cliff. i think that's kind of what you're going to hear from now. >> david cote told you that. a parade of ceos who are cautious. >> cote has a good business. i mention deere and honeywell, these are companies that right now were growing. and so they had a reason to hire. honeywell has done a remarkable job. made an acquisition in refining dirty oil. talk about something we really need. making shale gas into liquified natural gas. that's a growth business. he should be the guy who is bringing people to work. for every eight people who retire, he's hiring one back. he should be hiring eight back but he says, listen, i got to do this right for the shareholders. >> on january 1st, it's not as
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though the world will come to an end if we don't get a deal. people are still going to spend. they may just not spend quite as much or perhaps pull back down in anticipation of not spending much then. >> it's unknown enough that it feels like it's armageddon. you go on twitter, how many geddons do you have? you know, what's important is that we don't know. we don't know and we have these discussions. >> we have so much to talk about. we haven't got to retailers. gap and sears in just a moment. meantime, there's more economic data for wall street today. breaking news on industrial production just moments away. stay tuned for that. also ahead, senate budget committee chairman kent conrad, today's fiscal cliff talks and what he thinks should be the main parts of a deal. and a wireless networking firm that's taking on cisco is going public today. we'll talk with selina lo after
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the company's first trade. we'll have to see where we open. more "squawk on the street" is straight ahead. for many, nexium helps relieve heartburn symptoms caused by acid reflux disease. osteoporosis-related bone fractures and low magnesium levels have been seen with nexium. possible side effects include headache, diarrhea, and abdominal pain. other serious stomach conditions may still exist. talk to your doctor about nexium. well, having a ton of locations doesn't hurt. and my daughter loves the santa. oh, ah sir. that is a customer.
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let's not tell mom. [ male announcer ] break from the holiday stress. fedex office.
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>> welcome back to "squawk on the street." rick santelli here. we are ten seconds away from
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october. industrial production capacity utili utilization. here we go. 77.8. that's really a big drop when you consider our last look was 78.2 in expectations for a number very close to 78.2. some had it as high as 78.3. if we now look at the production side, that was down 0.4. down 0.4. our last month's look was up 0.4 revised up 0.2. this is split in half. that's multiples less than the expectation of 0.2 in october. on production side unlike isms we've seen, this number isn't reflecting a positive outlook and we'll have to monitor the response of the marketplace has been on the light side but remember, deal, no deal, it's
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friday. it's been a wild week. we have issues in middle east. traders down here will be conservative for the trade today. look for trend reversal. melissa lee, back to you? >> thank you very much. a pair of retailers in the spotlight this morning. gap raising full-year earnings guidance posting a jump in third quarter profits. the apparel retailer reporting an increase in north american sales and stronger profit margins. sears holding reporting a narrower than expected loss but a decline in sales at sears and kmart stores. two different retailers and two different stories and one that's turning around being the gap. one that's struggling and that being sears. >> numbers from gap are extraordinary. this is a remarkable job. they did that accelerated buyback. old navy up 9%. these are among the best numbers i've seen. sears i actually know that no one likes sears.
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i understand that. sears, the actual stores, were down less than 2% for comp store sales. contrast that with jcpenney down 26. >> sears domestic down 1.6. kmart was down 4.8%. doesn't seem like a turnaround. a slow, steady decline they are managing to some end that's hard to understand but involves trying to generate cash along the way. it's in a better position than it was a year ago when there was real concern at one point that they managed to stem about factors and whether they could get financing for christmas and selling season. what's the strategy here? >> what's the end game? the end game is you figure out what are 200 or 500 stores that actually make money and you put chips on them. that's what i said they should do for a long time. many years ago i had my fanciful view about what should happen there. sears has a good brand name. i don't shop there anymore. like many people i feel like the time has passed by.
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i do think they do generate cash. they made a series of spinoffs and they've done a lot of very creative things. this new ceo came in. it's not a disaster. >> the entire strategy seems to be generate enough liquidity and potentially generate enough cash at some point -- >> until what? >> i don't know. >> in canada you have to wonder in terms of -- sears canada was down 5.7%. target is making a giant push into canada as well. will sears feel more pressure on the canadian business? will that interfere with the overall objective of having 1 billion in liquidity. >> gary chronicled this better than anybody. number one in his accounting
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class in canada in the '80s. >> longer than anybody. what's he saying? >> dollar went to 1,000%. he said we don't feel liquidity is an issue for sears. it does have assets it can spin off. the balls stay in the air. people get shorted and they keep hoping that something will go disaster and it doesn't. again, jcpenney is the end game of when you don't have the right merchandise and you don't have the money. >> right. amazingly sears stock is a double so far this year. despite all of -- with the short interest, et cetera. >> let's not forget. >> controlled company of course. >> all right. >> you mean like communist chinese control? >> yes, actually. just like that. >> last night on "mad money," cramer gave you top five reasons not to sell everything right now. how should you make the run for profit? that's coming up next.
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and ruckus president and ceo selina lo will join us. more "squawk on the street" just you a hid.
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>> 6:30 before the opening bell to close out a difficult week if you're long at least on wall street. time for cramer's mad dash. it will make you happy. i don't know if dell
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shareholders will be happy. >> the company is struggling for relevance. pc sales. 19% decline year over year. very negative for windows 8. they didn't say that. negative for intel. again, hewlett packard, dell, time is passing them by. >> you are getting hit by two things. corporate side where they sell a lot of computers. fiscal cliff concerns. perhaps not spending as much. we know that. then you have consumers who are just saying why do i need another pc? >> bring your own device. that's been one. michael dell said that would not happen. it's clearly happening. >> what do you do here? >> there's a lot of cash. >> sorry. >> that's where it is going. why apologize? >> i don't know. >> i think you have to go. i think you need to raise on debt. there's a lot of stocks whether it be nokia or research in motion. these are of our era.
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it's where we are in the cycle. some companies do not have -- other than cash, a reason to live. >> let's look at this. >> this company has taken its future into its own hands. a game operator, some companies are not sitting down. they're tied of it. fiscal cliff. whatever. >> will vegas come back? >> right. let's stop letting the fates dictate and get control. i applaud penn national gaming for doing the right thing. >> a lot of companies choosing to do that. whether outdoor advertising or gaming. if they have the real estate, there's an opportunity to do it and make it tax free and they go for it. >> one reason you want to be in. your friend, jeff, decided to become a reit. good. companies do take matters into their own hands. don't sell every stock because
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of the fiscal cliff. >> five minutes until the opening bell. we're back after this. [ male announcer ] this is joe woods' first day of work.
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>> all right. welcome back. we're gearing up for that last opening bell here for the week on this friday. ruckus wireless ipo set to debut today. a lot of people here at the face of the podium and a lot of black labrad labrador. not real ones. stuffed animal dogs. >> very large ones outside. >> very large. not real also. big ones. still. out there. but one of the few ipos top bra brave the waters this week. ruckus priced at the top end of the range. >> one of those companies that gives you -- because of the overload of data, gives you a wi-fi alternative and great blood lines. i think that this frontier and at&t decided to go back and
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spend money to wipe competitors out. >> a name like ruckus and can others choose to withdrawal because of the choppy waters? it's symbolic of what's going on more broadly. >> i can't remember a name we have seen here that hasn't gone up in the first trade in a number of weeks when they first go public whether a growth company like this one or deleveragine deleverageing exercise as we have seen. >> ruckus has growth. we want growth. they'll give it to us. >> we lost about $600 billion in market cap since the close on november 5th, the night before the elections. it's been a very rocky ride down 5% overall for the markets. down six of the past seven trading sessions as we get set
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to reopen the bell here. ruckus wireless celebrating the ipo today. we'll speak to the ceo in just a few moments. a alzheimer's association of america is at the nasdaq. right now apple looks to open lower initially. at&t is beginning to sell the new ipad mini and the ipad 4. we could see some numbers. >> it's always fun to see all of the new ipad applications. there's a terrific article in "usa today" talk about how shoppers use it. they give you coupons. nice company where they are trying to interact with the people. they help retailers interact with people in the store and give you coupons. this is again another growth business. >> paypal very involved in that. the ceo has talked a lot about that.
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the ability of merchant to know who is in the store at any given moment. >> one day we'll look back and say why are they putting inserts -- one of the worst jobs i had in my career was putting inserts into the sunday papers. >> i've done that too. i've done that too. i used to assemble "the new york times" when my parents owned a drugstore when i was growing up. my sister and i would assemble the "times" and put it in the news section the next morning. >> that was valuable thing. money saving coupons. >> exactly. >> money saving coupons. >> they still stick them in the newspapers now. >> jcpenney relies on them. they did and they didn't. >> we don't need to snip. starbucks is a nice mover today given the generally flat market. starbucks is up three-quarter
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perce percent at this point. starbucks getting more into the tea game. they intend to keep those outlets open. no rationalization of real estate. howard schultz on "fast money" told us that customers are completely separate. >> i thought that was an interesting interview. the resistance by analysts to this was remarkable. no positive news. when i spoke to howard, those of us who have shopped there as i have, my daughter likes tea. she doesn't like coffee. i said let's go get a cup of tea. the problem is that it doesn't serve tea. howard noticed that. if you actually serve tea that could bring a new leg, which is why i thought it was brilliant. >> do you think if they served tea, people would buy more tea and more tea gadgets. i said i would like to have a
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cup of tea. let's get lipton going. they didn't serve it. howard is a brilliant man. i think that people sell him short. that's not been a great game to play. i think that the acquisition is brilliant. people don't think it is. i think they'll be wrong. >> it's a premium that investors are leery of. 53% premium the day before the announcement of the deal and a company that went from 46. you wonder what howard and starbucks sees at this point that could turn it around. he does. >> shares of sears which we of course have discussed are down sharply over 8% right now. shld shares down right now after what was a quarter in which comp store sales were down but i can't really remember a quarter where that hasn't been the case. >> i think it's been a huge
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number. a big scathing quarter so sales have dropped off. i don't really -- >> we tend to see big moves on the stock to see it recover one way or the other so often. >> great hedge fund manager doing a lot of great things. i'm watching nike today. announced a 17% boost in the dividend. i want to talk about something that's so ridiculous and facetious to some degree. if apple because of the bizarre nature of what the individual is holding, if apple did a 10 for 1 stock split, the stock would go up. of course you're not creating any value. >> do you remember during 1997, '98, '99 people would hear about a stock split and stocks would go up 20%, 30%, 40%. people somehow thought it was adding to value.
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>> i remember three for one stocks that coca-cola did when they realized they had a retail base and followed by pepsico stock split. the individual says, wow, okay, and it is excitement sorely lack. is it what we want versus buffalo bills playing miami dolphins where they could use five stock splits. i would cut back and say we need a pulse. nike gave us a pulse today. >> just a stock split without the dividend increase you would be less excited? >> apple board meeting they announce a dividend boost and stock split and people say why did i sell apple? again, it does not create value. it does create excitement in a market where the excitement went out when we were working in '98, '99.
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>> there have been moments of sheer panic which is kind of exciting. >> yeah. >> speaking of excitement, a lot of excitement on the floor here. you can see the huge crowd surrounding post 9 just looking over ruckus will debut and let's head to bob pisani because i think we're starting to get some sort of indication at this point. >> we are. 15 to 15.25 are indications. you do see duncan over there. i don't know if you can see sell selina lo. she'll make the first trade as we always do here. first 100 shares done by the ceo traditional. price talk 13 to 15 today. pricing top end of that range. did you see the pop in the
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futures? this mini deal some are calling it or no deal at all. a rally on reports of a mini sequestration deal. this is according to "the journ journal" here. no cuts in medicare. no medicaid. no discussions of any grand bargains. nothing like that. a lot of people said there's no reason to rally on this particular deal. others said, remember, the big point here is the white house is concerned about spending cuts. that's the weak part for them. if they can suddenly get some deal on spending cuts even a mushy mini sequestration deal, that is a big plus for them and then move on to address the issue of tax hikes for the wealthy. that's the easy part of the overall deal. traders are in a tough position. should hear the frustrations i hear. it's very hard to play the fiscal cliff right here. it's dangerous to go to cash right now because of the president announcing over the weekend we have some kind of deal even mini sequestration markets will rally and you'll get hurt. if you stay out here and if you
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completely have nothing to do with the market and you're also in a lot of trouble. dangerous to say in and dangerous to stay out. traders are reactive now and not pro-active. if we come in monday and market is down 200 points, i'm going to buy into it. up 200 points, i'm going to sell into it. there's reactive trading going on rather than pro-active and fancy options going on here. i was asked about office max this morning. it was up 18%, 19% in preopen. up big now. it's not because of any thanksgiving deals. there was ipo announced and they could get a significant cash payout from a ipo. i don't have exact numbers. office max is up very big today on that. finally, ruckus here. 15 to 15.5% right now. we're not quite there in terms of opening yet. back to you. >> again, i was talking about
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that with office max. companies are tired of where their stocks are. they do have firepower. balance sheets are good for the most part. rick santelli at the cme group in chicago. go ahead, rick. >> if you look at a two-day chart of ten years, you can see that we're hovering on that 160 area. rates have started to creep up just a little bit. maybe optimism that the weekend effects will be soothing to the downside that we've seen in equities. when you open the chart up to one-week chart, definitely we're down a little on the week. thank god for computer generator scaling. in reality every single day this week has been in a closing range of two basis points between 1.59 and 1.61. talk about consolidation. what kind of conclusions am i going to draw from a market that's so tight at these levels in the fixed income market, treasury market, the safe harbor market, my conclusion is there's not a lot of change in the
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landscape. that's what treasuries are telling us. whether it's europe or whether it's what's going on with the fiscal cliff. where we do see pro-active movement is based on politics in japan. today is one of the few days this week that the dollar isn't rallying. the two-day charts it's not give be up ground it gained and when you look at the one-week chart on the dollar/yen, forget about scaling issues here. it's a whopper of a move. jim, back to you. >> fabulous report. we were talking about japanese being buyers. >> treasuries. it's moving up to almost number one on the list behind china. >> let's check with the latest news in energy and metals and go to sharon epperson at the nimax. >> jim, it's all about the middle east. that's what traders are focused on at the moment. it's the reason why we're looking at wti oil prices above $86 a barrel and brent crude moving higher as well. as we continue to see fighting escalate in the gaza strip as we
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continue to watch what israel and what palestinians are doing in the area and the fact that there does not appear to be any cease-fire on the horizon although egypt's prime minister is in gaza today urging some international cooperation. we're also looking at the fact that oil prices here in the u.s. have basically erased this week's losses because of the gains that we're seeing currently in the oil complex. we're also hearing reports about iraqi enjoy saying that arabs should use oil to press israel over gaza. those headlines helping to cause this bid in the oil complex. in the gold market, we've seen steady declines over the last several sessions and now a little bit of stabilization in the gold market. there are concerns based on the world gold council report about demand particularly out of china. we've seen the cme lower margins for gold and silver so that may have an impact on the trading activity from here. carl, back to you at the white house. >> all right. thanks so much. in a half hour from now the
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president will hold key meeting with top congressional leaders on solving the fiscal cliff. we'll be over this crit aleveic event. both sides of the aisle will be covered. "squawk on the street" is coming right back. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong.
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>> welcome back to "squawk on the street." still awaiting the first trade on ruckus wireless. it traded top end of the rage. bob pisani is somewhere in those crowds. we're getting better indications right now. last indication was 15 to 15.5 a couple minutes ago. we may be a few minutes away from that. other stock moves that we're taking a look at. now low on dell. now down more than 7% and the bloodshed is being felt with hewlett packard down 2.4% as
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well. everything is going against them right now. tough competition from apple and others. and people just aren't using pcs as much. >> when you get that kind of decline in pcs and even the emerging market numbers were terrible. they've got server business that had been their hope. i struggle for a reason to own dell other than the fact that they have a good billion sheet. i think that time is passing them by. one of the things that is so hard for people to grasp is that there will be a name like dell and they'll say that was always a great trader, great investment. dell is one of the stocks that during the '90s would double and double. remember, bunncr reinvented its and honeywell reinvented itself. >> so did ibm. >> i'm just saying that when you see companies just because you
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know that they have a big brand name, whether they are nokia, which is trying to reinvent itself or rimm, don't think that's necessarily an entitlement. jcpenney, an entitlement. just because you know the brand. i remember the letter z was walworth. we thought who would take them private? best buy. that's this year's walworth. who will take them private? there's no reason why companies must necessarily live. >> you're right. the larger story in covering business as we have for so long is always a fascinating one to watch the companies that are able to embrace change and most often during a period that's actually not bad for them. when you have a leader who is able to say we need to go over here even though right now looks okay here. that's hard to do. really hard to do. >> that's perhaps why there is some questioning the apple store. if there are questioners of the apple story, apple is in a
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position where it's not dominant. comfortable in terms of cash position. is it identifying the next big thing down the line? we don't have clarity on apple tv yet. some analysts say next year. we don't really know what that product is and whether or not that's going to be the next thing and so at this point, what do you do? >> by the way, you always have to innovate. you can tell that to hostess. you can't just keep having wonder bread when people want to eat something else. >> why mcdonald's domestic president lose the job? when you go through the fine print, no new innovation at the stores. bacon cheese didn't work. everybody has to continually have some reason to go. this is where you want to come to costco because you'll be surprised. in the interim you'll buy 60-inch tv and buy it there and not sears. >> or best buy. >> these are clever merchants to figured it out.
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>> ruckus has opened for trade. looks like it is trading lower at the get-go. i don't know if bob pisani is out there in the crowd now. >> price talk with 13 to 15. it was wobbling around between 15 and 15.25. there's celeselina lo right then the bright red dress. the ceo and quite noticeable here. ruckus wireless play essentially. 13 to 15 price talk. priced at 15. opens at 15. right now trading at 14.81. back to you. >> that's a bummer. >> we'll speak to ms. lo in just a few minutes on the heels of this. of course their competitors here are cisco systems, hewlett packard. >> cisco had a good quarter.
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>> it's up. >> it's still up. we're still up. >> that's not bad. >> i keep pointing out that i'm beginning to see the circle into the companies that will deliver numbers no matter what. let's go back to companies that did well in previous debt ceilings wrangle and wrangling. that's going to be where the money is going to go to. >> we'll talk to the ceo of ruckus, celeselina lo opening a. now trading lower. much more "squawk on the street" straight ahead. ♪ [ male announcer ] the way it moves. the way it cleans. everything about the oral-b power brush is simply revolutionary. oral-b power brushes oscillate, rotate and even pulsate to gently loosen and break up that sticky plaque with more brush movements than manual brushes and even up to 50% more than leading sonic technology brushes
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ruckus wireless celebrating its ipo today. trading lower by 2.5% right now. joining us is selina lo. great to have you with us here at post 9. >> hi. >> so many other ipos this week withdrew because of market conditions. you opened at 15 but the stock is trading lower. any regrets? any thoughts about possibly delaying this thing prior? >> no. we had had incredible reception when we were on the road.
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we had some high quality investors. i believe that this -- we can't control the economy or the stock market but we feel good about our economy and the level of interest. >> ms. lo, can you talk about who your competitors are and one of the things we've been talking about is dell is going by the wayside. sears. who are you replacing? who would i have used before and now i use you? >> we make wi-fi equipment for service providers and enterprises. our equipment is extremely reliable and easy to deploy. and now with so many mobile devices and the whole interest in mobile internet, we are helping service providers add capacity to the network. so we're actually replacing older wi-fi equipment but we're adding capacity and not replacing anything. >> so what differentiates you? i don't understand what differentiates you from much
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larger competitors like cisco. >> we have some unique technologies, one of which is a smart antenna system that can in realtime steer signals around interference. with the increasing number of wireless devices and number of networks out there, there is just a lot of noise in the air and everybody's work slows down when that happens. our smart antenna technology is able to in real time go around interference and let devices transmit in a reliable consistent way and let mobile users get the best experience. >> so service providers who are overloaded at various times, maybe at&t overload and how do they signal that it is your turn to help us? >> our systems can learn by itself. in realtime it adapts to the environment. nobody needs to turn any knobs or touch anything. >> in terms of your geographic revenue mix, 65% of sales come from foreign customers.
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what are geographies you're most exposed to? >> we have geographically distributed. our business came from geography. we're not dependent on any particular region. however, this whole mobile internet is really a secular movement that crosses all regions as well as different markets and so we are not dependent on any single market. >> about 90 million in net proceeds to the company from this ipo. what are you going to do with the money? >> i think we will buy some shoes. no. >> that's a lot of shoes. >> there's a lot of investment to be made. we feel very strong about the market so in the near term we are going to certainly invest in our engineering and sales and service but also i think, you know, there are lots of technologies in adjacent markets
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that are interesting. we may want to grow faster than we would -- >> thank you for stopping by. selina lo, ceo of ruckus wireless. latest ipo at the new york stock exchange. >> use money to hire people. like that. what do we have coming up on "mad money" tonight? >> we have a bunch of new restaurants that have come public and we're going to tell you which ones are worth being in and which ones you should sell. >> i'll tune in for that. >> definitely. >> i hope so. tune in at dinner. >> thank you, jim. have great weekend. see you tonight. let's head down to carl in d.c. >> i can't wait to hear on monday where jim shopped over the weekend, guys. in the meantime, the economy and your money at stake as the president and congressional leaders get ready to begin talks to avoid the fiscal cliff. we'll get views from opposite sides of the aisle in the next hour. republican senator mike lee of utah and then later senator kent conrad, democrat from north dakota. don't go away. ♪
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welcome back. good morning. let's hit the road map for the next hour. reports that talks on deficit reduction could be kicked down the road until 2013. we'll find out what republican senator mike lee of utah will have to say about the latest developments in washington. >> plus, walmart's opening of its stores on thanksgiving this year has several hundred workers in uproar. we'll sit down with a member of the coalition organization united for respect at walmart for his thoughts on walmart's wages, health care and black thursday policy. >> apple's market cap dipped below $500 billion as shares sit down more than 20% in the last month alone. now below 520 a share. should you buy this dip in the stock? >> first, let's head back to d.c. where of course carl is anchoring our coverage there. two sides getting together on
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the fiscal cliff within the next 15 minutes. >> not far away from the arrival of boehner, mcconnell, pelosi and reid. john harwood made his way to the north lawn. good morning to you. i was thinking this morning. you have made good calls this year. you said it was going to be romney as nominee when people thought newt or perry. you th i got to ask you this morning. does this get solved before there is some serious -- before the countdown clock is dangerously close? >> i think so actually. i don't think it will get solved by december 31st. i think there will be some mechanism put in place to get the country and economy past december 31st. some way of avoiding the sequester. it is possible that the tax cuts will expire with no solution but i think we will get one early in 2013 probably around the time that the debt limit would need to be raised which would be in
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february. >> a "journal" story about the white house having talks. is it filler ahead of the real news today. is it something of an offering to civic organizations coming later on? what does it mean? >> everyone is looking at alternative to the sequester. they want an alternative plan to avoid the sequester. both sides want to do that it i'm hearing in my ear that harry reid arrived for the talks. harry reid of course is one of those who has drawn a hard line since the election. everybody, white house and democrats as well as republicans, have got to find a way to avoid the sequester because it was designed so it wouldn't take place. >> any doubt in your mind that rates go to 39.6? >> yes. the president, i don't think, has a principle objection or principle reason for insisting
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on 39.6 per se. he wants more revenue from the top end. what he said in his news conference the other day is he's skeptical that you can get the revenue required by getting rid of loopholes and deductions. my guess is that you end up in negotiated solution that involves loopholes and rate going up partway to 39.6. >> there's been chatter this week that treasury and this is just a rumor, might tell businesses and their payroll departments don't change your withholding calculations after the end of the year. we may go over through new year's but there may be a solution quickly enough where you don't want to revamp your computers again. >> that supports the idea that i mentioned which is you may go over the cliff for a short period of time while they negotiate a solution, but i do think we're going to get one. >> with all of that we await the arrival of speaker boehner. harry reid has already shown up. i believe that is the vice
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president making his way to the west wing not too far from here. melissa, over to you. >> we're going to bounce back to headquarters. breaking news here on gm. kayla tausche has the latest. >> i learned from my sources that gm and ally are near a deal. that deal is set to be announced monday. $4 billion for operations of alley a ally in europe. it's critical for gm's operations there and we've been expecting this since ally put international operations up for sale. that will be announced monday and ally will have $9 billion to repay treasury for its bailout. back to you. >> thank you for that. kayla tausche at headquarters. with one week to go before the biggest shopping day of the year, let's get back to earnings movers this year. shares of gap higher. retailer look likes it's on a
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roll. roxanne has a mutual rating up $37 a share. good to see you the. >> thanks for having me. >> do you believe the turnaround story is firmly in place at the gap? >> they are making a ton of progress. third consecutive quarter where all three divisions are comping positive. over the last 12 years they comped positive for 2 of 12. this is certainly a good start. we're going to be continuing to look for momentum to continue. really key is going to be whether or not traffic can also turn and whether they can get new customers back in the store. >> are you getting a sense at all whether or not it's gaining back market share from the competitors to which it lost the share? namely the likes of a j. crew or h&m? >> i think what is really important to keep in mind is that for every comp point that gap does get back, that's hundreds of millions of market
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share that's lost by someone else. so for retailers that aren't on their game as much as they were before, we are seeing that the misses are a little bit bigger. you could look to a number of retailers thought the second that have underperformed this year and probably in part because of gap. >> the stock price has been as you know better than i has been phenomenal year-to-date up 80%. the question particularly when you see how it has come back down over the last month has got to be whether we have run out of momentum on the upside. i see they are throwing in the towel on the sell today. that may be the last shoe to drop in terms of upward momentum. >> management raised guidance for the full year. we took our numbers up quite a bit for next year. knowing that gap is going to be one of the biggest beneficiaries of sourcing costs reversals, we're looking for a sizable margin gains not only in fourth quarter but early next year and
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if you were a believer that the comp momentum is in early innings. story has legs. that's something to look out for. we don't necessarily think the run is done. >> in terms of trying to figure out where they are gaining market share from, roxanne, if you look at banana republic, same store sales up 6%. who is losing at the gap's expense? >> you know, it's really hard to pinpoint specifically who could be losing. it's a pretty diverse retail backdrop. you could say to some extent it's a little bit at the department stores and really it varies across specialty retail space as well. >> could it be a jcpenney? that's not normally cited as someone who is gaining market share from jcpenney but it does seem that perhaps jcpenney same store sales decline of 26% in the latest quarter. it's so big that maybe they are losing and just leaving customers to others. >> it sounds like jcpenney's
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problems may be self-inflicted. i don't cover them. my colleague does. >> what's your favorite going into the fourth quarter? >> my top picks have been tjx and ross at this point. >> okay. good to speak with you. thanks for your time. questioning what is really at stake during the fiscal cliff negotiations in about six minute's time. we'll take you back to d.c. for the view from the heart of the republican party with the senator for utah. walmart making headlines again as thousand was employees vow to hold protests leading up to black friday in advance of retailers being open for thanksgiving day. we'll hear from an employee in just a few. >> here's another fiscal cliff fact as we head to break. >> over president barack obama's first term, the federal debt to
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>> i have said he's wandering
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the earth and what can he do? he can't murder you. he can't burn your house. only thing can he do is defeat you for re-election and that means more to you than your country, you shouldn't even be in congress. >> that was former republican senator alan simpson yesterday orrin "closing bell" with maria talking about governor norquist. the president's meeting on the fiscal cliff is happening this morning with congressional leaders from both parties scheduled to begin just about right now. we're beginning to see arrivals on the north lawn. republican mike lee of utah joins us this morning from capitol hill. senator, good morning. good to have you. >> good morning. thank you. good to be with you. >> i assume you heard what simpson said. do you feel held hostage by the likes of grover norquist? >> certainly not. grover norquist is sometimes
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credited with this movement. it's not about governor norquist. it's about a commitment to the idea that people are overtaxed and that raising taxes only raising taxes on the top rate payers will inehurt the poor. we'll lose 700,000 jobs even if we just increase taxes on the rich, on the top rates. if you raise taxes on the rich, it hurts the poor. raise them on the poor, it hurts the poor. that's the concern. >> senator lee, it's john harwood. yesterday i led a discussion sponsored by the bipartisan policy center on the fiscal cliff. one of the people i was talking with was the senator you defeated for re-election last year or two arizona ago in utah. he said two things about the fiscal cliff. one, that there will be a deal in the end that involves some tax increases and, two, one of the reasons for that is that the tea party, the influence of the
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tea party peaked and is declining. do you think both of those things are right? >> look, it's difficult to predict what's going to happen. i'm not going to claim to have the ability to predict what is going to happen. a lot of people disagree about what is or what isn't a tax increase. as far as the insinuation that the grassroots conservative movement gaining momentum in 2009 has somehow peaked and is in decline is simply not true. >> even after losing an election where all of the swing states except one went for the president? >> all three new republicans in the senate easily identified with the tea party movement. >> democrats gained seats in the election. >> they did gain seats. and where we had tea party candidates, they well. we have to remember this is still the movement that brought about an historic shift in the house of representatives in 2010. we held onto nearly all of those. this is not a movement in decline. the fact is what you referred to
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as tea party is part and parcel of what is the republican party. the tea party is about conservative principles and republican party is the conservative party. >> let's take your point of view that part of party is not in decline. it's been said that the tea party in and of itself is not a huge fan of millionaires or certainly not intent on protecting millionaires and they are more about smaller government. why should your opposition to tax rates on the wealthy be so robust? >> for the exact reason i described a minute ago. when we raise taxes on the rich as young predicted , we kill 700,000 jobs. those are not ceo jobs. those are going to be americans living paycheck to paycheck. hard working americans who are struggling to get by. we don't raise taxes because it hurts those that are most vulnerable. >> there are disagreements over what constitutes a tax increase. are you saying that there are
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ways that the tax code can be reformed to raise additional revenue that you would accept and not consider it a tax increase? i don't mean dynamic scoring. i'm talking about raising revenue that is in a straightforward way. >> i'm certainly saying i believe in the need for comprehensive tax reform. there are those that could describe that as tax stabilization. that could give us a more steady revenue stream. we have to remember regardless of where the top marginal rate is, historically we demonstrated that we can produce only an average of 18.5% of gdp for our income tax system. that's true whether it's at 35% as it is now or 75% as it was three decades ago. the trick is we need to find a stabilization mechanism so we don't have peaks and valleys. last year we generated 14.5% of gdp through our tax system. one of the main reasons it needs
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to be reformed is because of that volatility and will give us more revenue in that we get a more consistent stable source of revenue. >> it's got to be a good week to be young. all of the publicity they've got from you citing their study and speaker citing their study. we keep hearing from business people that say tax rates in and of themselves never altered their incentive to invest or to work harder. other studies from hamilton project that basically hint the same thing. are those people wrong? are they lying? >> i don't think they're lying. they may well believe that. the studies that i reviewed and studies i trust suggest that it does have an economic impact that's not a positive one. now, president obama himself two years ago and a year before that himself indicated that in a time of economic downturn, it's a bad idea to raise taxes. it's a bad idea to raise taxes on anyone. so there is pretty broad
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bipartisan consensus around the fact that when people are struggling and unemployment is as high as it is now, it's not a good idea to raise taxes. >> an important day here in washington. appreciate your time as always. >> thank you. >> senator lee from utah. melissa? >> all right, carl. walmart kicking off black friday earlier than ever this year opening stores at 8:00 p.m. on thanksgiving day. employees aren't happy about it. we'll talk to one walmart worker dusting off his protest gear and setting get so take on the world's largest retailer. back in two. ♪ ♪ [ male announcer ] 'tis the season to discover the kid in all of us. the memories that last, start with the gifts that last. ♪ enjoy free shipping and great values
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perhaps bottomed on the morning. made a couple calls. best i can come up with is there were hopes there are more shared donation from jcpenney to sears. perhaps not the case where same store sales down 4.8%. came up 1.6% at sears domestically. there's a look at jcpenney. that's one rough week for that retailer continuing this morning. >> investors are pointing out looking at jcpenney's debt as you point out. the debt markets often get things out before equity markets here and indications are that jcpenney may be having increasing trouble here. it's confirmed. >> let's stay in retail. several stores including walmart are moving black friday into turkey thursday. the thinking is opening doors earlier actually on thanksgiving will help give shoppers a jump on the holidays. for some walmart employees already upset about health care
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and wages, this is frankly the last straw. we cross now to colby harris who worked at the produce department of walmart for three years. where are you joining us from? >> i'm joining you from dallas, texas. >> are you working today? >> i was actually scheduled to work today, but i called off the job today. i'm officially on strike. >> why are you on strike? >> well, i'm on strike because of walmart's continuous retaliation against those of house choose to speak out against all of the injustices we have inside of our job and me and quite a few other associates have been taking actions last month building up to black friday. >> and why the move now? what is happening internalaly a far as you are concerned? >> we've done everything within our power to sit down and talk
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with corporate executives of walmart. we tried to talk to our managers and address these issues as far as treatment of associates who choose to speak out, the retaliation and they seem like they just don't want to listen to us and address these issues so we just feel like now is a time for all of us to stand up and to speak out and let everyone know that the things that go on inside of walmart are sometimes treacherous and we're struggling really bad. >> what are the consequences of you now talking to me on national television? what will happen to you now? >> well, nothing is going to happen to me. we're not going to take any form of retaliation. this is just to let the public know and to let the media know that the image that walmart paints that everything is peachy and associates are ecstatic and living great is not true. they're not going to retaliate against me.
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>> are you trying to join a union? there are a lot of walmart workers that would like to join a union and there's an effort and possible walkout on black thursday by workers who are voicing outrage at the discrimination they feel from walmart, those who want to join a union. is this all a part to try to unionize? >> this is us trying to let them know that we're not going to take anymore of what's going on. i wouldn't say we're trying to unionize. i would say we're trying to get these issues that we all have addressed. and where that's through unionizing or protesting or whatever means that we have, we're going to do. i wouldn't really necessarily say that we're trying to unionize. we want these issues addressed and fixed. >> why don't you think you're going to be retaliated against? i mean, typically that's often the case. don't you think you may lose your job as a result of this?
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>> if i lose my job as a result of this, i'm pretty sure quite a few people would stand up and protest about that because if i were to get fired because of this, that would be another form of retaliation. there would be a lot of media attention if they were to take that step and to fire me because i'm choosing to speak out. it would prove our point further about the fact that with we do speak out, we get retaliated against. i don't think that would be a good idea for them to do that. i think i'll have my job after this. >> isn't it the case that maybe this is just not a great job and that conditions that walmart offer are just not great? that's the way that it is. that may can't be changed. in fairness to walmart and the business, they have released a statement in part about what may happen on thanksgiving saying that this is just another exaggerated publicity campaign, headlines to mislead our customers and associates. we have more than 1 million associates working throughout the holiday weekend and they are
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excited about our black friday plans. how would you respond to that? >> well, my response to that would be that's just walmart's attempt to just avoid the issues that we have brought to their attention and they know need to be fixed. that's just another attempt to try to show their customers that things aren't going the way that we say they are and that's not true. i work for walmart so i'm pretty sure i know what conditions are and they're not good. that's just another attempt for them to try to sway the customers and make them believe that things are as good as they say they are and that's not true. >> it's good to meet you, sir. thank you very much. colby harris joining us from dallas. thank you. >> shares of dell are taking it on the chin today. of course after releasing third quarter earnings after the bell. revenues fell short. the company's outlook has really sparked some concern. does dell have the tools necessary to adjust to a rapidly changing market.
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>> tension in the middle east, looming fiscal cliff and much more. find out what's catching attention of traders as we head into the weekend ahead of the thanksgiving holiday. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus
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>> that's an agenda that democrats and republicans and independents and people all across the country share. our challenge is to make sure that we are able to cooperate together, work together, find some common ground, make some tough compromises, build some
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consensus to do the people's business and what folks are looking for and i think all of us agree on this is action. they want to see that we're focused on them, not focused on our politics here in washington. so my hope is that this is going to be the beginning of a fruitful process where we're able to come to an agreement that will reduce our deficit in a balanced way, that we will deal with long-term impediments to growth and that we're also going to be focusing on making sure that middle class families are able to get ahead. i want to thank all of the leadership for coming. and with that, we're going to get to work. thank you very much, everybody. appreciate it. wait. wait. excuse me. there's actually one other point that i want to make. and that is that my understanding is tomorrow is speaker boehner's birthday. for those of you that want to wish him a happy birthday, we're
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not going to embarrass him with a cake because we didn't know how many candles were needed. >> yeah, right. >> we do want to wish him a happy birthday. >> thank you. thank you. >> all right. thank you, everybody. >> the president pulling a steve jobs. one more thing. a room full of congressional leaders and cabinet members, you know, one question is going to be the degree to which the president is involved and that moment was choreographed to some degree, right, that pat on the back and that happy birthday. >> those are two key figures. president obama and john boehner almost got a deal in 2011. that's a place to pick up the discussions and i think you saw the president econfident there just winning the election there and house republicans back in the majority in the house and
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that's the dance to the finish line and i think they will. >> politico talked about whether or not the white house has learned its lesson in going into a room, a bunker, with the speaker, since it didn't work out the way they wanted last time around. do you think the president will be as involved or can he hand this off to someone else to negotiate? >> i think he'll be as involved. i think he'll be involved inside the room and outside of the room. the strategic turn the president made in fall of 2011 after the failure of the talks, he took the case to the public. i don't think he'll stop doing that. he'll try to keep the pressure on say i got mandate to raise taxes for people at the top. if you are willing to accept that, we'll get a deal. >> there code words you'll look for afterwards to see whether or not today was successful, a bust, fruitful as the president said? >> we've been hearing them from both sides in their public statements and the president's news conference the other way. one of the magic words for republicans of course is
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revenues. and the same thing for the president. that is to say revenues, meaning money, opposed to rates necessarily. the president did not draw an absolute red line at his news conference saying i have to get 39.6 as the top rate. what he said was he is skeptical that without some increase in the rate, you can get as much money as he thinks is necessary to make this deal. >> meantime, people are beginning to wonder if in fact there is a logjam at this level. is there another path through which the white house goes to, a corker or alexander or a conrad and works out a deal with other rank and file congressional members rather than the leadership? >> i don't think so. i don't think that can work in the house of representatives. in the senate, we have a group of senators, bipartisan, somewhere between 20 and 40 who are in support of a balanced plan who negotiated one in 2011. they didn't get very far. you really have got the house to
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move as a precondition for getting the senate to go. >> with that spray that just saw, president and speaker, wheels are in motion regarding the fiscal cliff discussions. we'll be here all morning long and we'll try to bring you the latest as it happens. "squawk on the street" is back in a minute. when you take a cl. ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this.
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>> let's talk about apple. it has lost 25% of market capitalization since september highs. will power joins us live. and also we have a senior
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analyst. what do you say to people who hold apple stock at this stage? >> there's a huge opportunity not only in mobile but also new markets like tv and particularly the near term is data that we've had is that iphone 5 is doing better than what the street is thinking and that should carry for a few quarters. i tell them that it doesn't look pretty today but there's brighter future in the next month or two. >> so it bounces back in your view? the stock is going higher? >> absolutely. i think that the stock is going to react to better iphone numbers and based on our checks throughout the quarter we survey people and keep doing checks. the supply right now we check 70 stores a night at 97% of sprint phones. so we need that to get to 100%. as soon as that does, they'll be at a point where they supply demand. good news is demand is there. >> if gene is right, why has the stock fallen so dramatically.
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>> i think it's a bit of a death by thousands of cuts. we talked a lot as stocks fall that questions are around pace of innovation and concerns around structural changes to gross margins. questions are on competition. you have profit selling. you have a combination of those factors that impacted. we like stock at these levels. it's always difficult to pick a hard bottom. if you have a 12 to 18-month holding period, you'll be rewarded off these levels. >> these are deep cuts concerning the massive cut we've seen in just a couple months. we're at a point in investor sentiment where it doesn't matter what you say about iphone 5 sales and ipad mini sales and all that. people expected that. that's what got us to $700 plus a share back in september. any analysis as to where stocks should be know if we take your estimates for the fourth
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quarter. is there even a premium that's not been reflected in the stock based on just what we know about the fourth quarter? >> with just on the fourth quarter it comes down to what the multiple is that you're going to pay for it. if you assume 11 times multiple you can get to a stock at $900. significantly higher. it's just hard to believe. at the end of the day the earnings power is going to be there. so as we talk about it death by 1,000 cuts. the reality is stocks should be significantly higher and i think $900 is not going to be there tomorrow but we should be on a pace to that based on these earnings. >> we have a development from one of your rivals today. a note suggesting that a major cable operator is conducting tests to determine if it could handle the sort of band width demands that connected hdtv capital might generate and time warner cable ceo at a goldman conference suggested that the company would consider selling
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tv subscriptions using third-party technology. is apple tv on the way and what do we make of that now for investors? >> i think there's no question that they've been working on a tv product. what form that takes remains to be seen. we think they have looked at multiple paths. our expectation is that they would roll out a product in 2013. aside from the opportunity opening up a new market, it could really help redemonstrate apple's ability to be a leader in innovation. that's what we need to make sure it's still there. >> provided they get it right. presumably there is an execution risk here. the product doesn't fly like so many tv products have not flown. notably the present apple tv. >> there's no question about it. apple has a great track record of not only innovating but integrating software and hardware above and beyond anyone else in the marketplace. if anyone can find a way to turn the cable industry and tv industry upside down, you know,
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i would bet on apple. >> gene, do you agree with that briefly? >> i would. now i would just ask one other thing. 90% of investors that i talk to believe that apple tv is going to be just a little box and that's the future. i think very differently. i'm on the same page as will. an actual television in 2013 and that will be good for the multiple. >> thank you very much. >> still ahead as reports surface that decisions surrounding deficit reduction could be kicked down the road to 2013, what does democratic senator kent conrad have to say. rick santelli, what are you working on for the next big hour? >> today is easy. we'll have a civics lesson. i heard a lot of talk about tax increases and the president. he's a constitutional lawyer. you know what i can contend? today we'll talk about article 1 section 7 of the constitution. you know what it says? i'll read it.
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i want to make sure we get it right. it says that all bills for raising revenue shall originate in the house of representatives. we'll talk about that little fact at the top of the hour. at optionsxpress we're all about options trading. we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? it's a lot easier to find out if a trade is potentially profitable. just use our trade & probability calculator and there it is. for all the reasons you trade options - from income to risk management to diversification - you'll have the tools to get it done. strategies. chains. positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? around here, options are everything. yes mom, i'll place a long call to you tomorrow. i promise.
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>> many gifts offered on facebook will be cudeveloping revenue for facebook and the site. jason goldberg, good to see you once again. how big is this going to be for fab? >> big potential. facebook is starting to launch this gifts product which makes it easy for people to send gifts to facebook friends. we'll see how well commerce does on facebook. we're one of the first few partners working with them on this. this holiday season we'll have about 100 fab products on facebook. maybe more. 200 to 300 products on the site right now. it's just real easy. look at one of the facebook
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friends whether it's their birthday or go to their time line and send them a gift and transaction happens on the facebook side. as they open this up to a few million people in the u.s., it has big potential for us. >> any indications yet? is this live and at one point do we say it works out? >> it went live last night. we'll learn a lot over the next few days. they seem to be pushing good. it's a great user experience. live on mobile as well. i bought gifts on facebook's mobile app this morning. two clicks to send someone a gift. real great experience. >> so difficult to know whether it will translate into hard dollars a lot of these ideas for everybody. what are you doing? are you stocking up on inventory for this? can you give us an idea of your expectation, your physical expectation here? >> we actually went out and bought more inventory. >> how much did you buy? >> we're going to sell a few million products during the holiday season if we went out and bought a few hundred thousand more. we'll see what it amounts to in terms of potential sales. we're seeing the holiday season
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start early this year. we saw for instance in the lasts almost a doubling of sales. >> a few hundred thousand? >> yeah. absolutely. >> this is going to be worth in revenue hundreds of thousands of dollars, not millions. >> if not billions. >> but a few million. >> you know, we have an average price point of a gift around $40 and we bought a few hundred thousand items and significant amount of money. >> you launched free shipping permanently. >> permanently. >> this week. on orders over $75. 2% right now of orders would qualify? >> the other way around. 98% of product on fab qualify for free shipping for orders over $75 an it's something that's here to stay. we think that shipping should be fast and free. and it's up to us as a merchant to work that out with the numbers. >> how does that work out with the margins? if typical gift is $40 and order a couple, how does that work out eating the shipping costs? >> since launching free shipping
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just yesterday, you saw a $8 increase in the average order value. do i want to pay $5 for shipping or another item? for us, you know, on the long term it works really well for the markets. >> is there free shipping going back, as well? might be more inclined to buy something with free shipping but may be impulse items and might return them at the end of the day. >> on fab, we sell over 10,000 unique every day designed products every single day. we have very little -- low return rates on the products. it is a lot of home wares, art, jewelry. not the kind of stuff people send back too much. so not really worried about that part of it. >> okay. we'll leave it there. we'll check with you in the holiday shopping season. >> thank you. >> ceo of fab.com. dell shares sliding today after the third quarter earnings not great and revenue, of course, missing estimates.
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outlook also a cause for concern. let's bring in the senior equity research analyst. has a neutral rating on dell. $10 price target. you have to quickly target the price target if you're neutral on the stock. down over 6%. expected on your part or perhaps a bit of an overreaction? >> i think it's a little bit of an overreaction. clearly, the results were nothing new in terms of what we saw, what we saw was that degradation is what we expected. especially pcs. they were weaker and only bright spot and 4% growth is nothing to get too excited about but in this environment those clearly is somewhat of a bright spot. the stock reaction is a little too much but over time we think it's worth $10 and where it gravitates towards in the near term. >> not a great endorsement. the long-term prospects for this company and think about right
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now at least the pullback or unwillingness perhaps on the part of corporations to spend a lot more money, meaning less pcs, fewer pc sales and then the changes of consumer behavior, what is the growth trajectory if there is one for this company? >> it's extremely hard. clearly the results clearly underscore the big challenge they have. the big part of their business is in pcs and they're not growing and even within the pc market their growth areas is not participating. tablets against pcs and more than 50% of the revenues from that segment. it is really hard for them to show growth from there and on solar side, enterprise side, making progress. they're doing some things but it's too small to move the needle for the overall company. i think it's a really long time before we see growth from the company. >> so you're at a neutral because there's an upside of $8 to $10 at this point?
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i'm trying to understand the thesis of investing in a company like this where you say, you know, you acknowledge that this is going to be a very, very, very long slog. >> yeah. and that's exactly why we have a neutral. we think investors are going to -- not get good returns on the money on dell. they're better off looking elsewhere for their returns and this is a place where the turnaround takes much longer than i think even management thinks it would. and that's what's driving the neutral rating behind it. we don't think there's much on the stock at this point. >> the theme of perhaps shorting or staying away from companies rely a lot on pcs applying to other companies, including hewlett-packard. do you think this is a change in terms of pc demand or a dell problem? >> yeah, no. i think there are two things. i think it's little bit of both. basically, there is a change in the pc market. pcs are led by tablets and with
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windows 8 they'll be more cannibalized with hp and dell and the winners are going to be some of the asian makers selling pcs less than $500, around $500. some of them do well but in the longer term it's market is slow and dell's focus at the high end of the market which is even slower. >> thanks for your time. appreciate it. till to come, the markets may not be flying today but you can privately less than you might have thought. our million dollar minute when we come back. melons!!! oh yeah!!
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in today's million dollar minute, how sharing could have you flying private for a fraction of the cost. robert frank explains. >> reporter: this is your chance to fly like a millionaire jet setter at a fraction of the price. >> single share of this aircraft is 1/16th of the plane is $1.1 million. now, that buys you a five-year contract, 250 hours over the 5 years. >> reporter: the fractional jet ownership program allows multiple owners to share a private jet and looking at the newest member of the fleet, the leer jet 85.
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>> the lear is made from a special carbon fiber composite to be lighter, faster and thinner fuselage for more room on the inside. >> you will see immediately that it's almost 50% larger than any aircraft lear jet has ever built. >> reporter: it hits speeds of mach 82 and a range of 3,000 miles and ones one of the most efficient engines on the market. for cnbc, i'm robert frank. >> david, you're saying that that's not enough flying time for you. >> 250 over 5 years, 50 a year, california alone -- >> you're a jet setter. >> he is. >> no, no, no, no. not at all. >> just joking. >> one day maybe we can all aspire. >> we can share. >> how's that? >> never a private jet. >> there you go. if i can share, you're welcome. >> thank you. >> thank you, david, in advance. turning to the downside, let's head it down to the nation's capital. >> i want to ride on david's
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jet. that's all i care about, guys. see you later. as congressional leaders and the president convene to discuss solving the fiscal cliff, we're at the white house to bring you the news first. both sides far apart. will they rise above partis partisansh partisanship? >> committed to solving our fiscal challenges. but i refuse to accept any approach that isn't balanced. >> and that's why we say to this president, we want to work with you on solutions. >> this is an opportunity time for us and for the american people. to demonstrate to all americans that we are here to get the job done. >> so many challenges that are ahead of us, the american people need to see us act courageously, think selflessly and lead boldly. >> i believe this is solvable. i'm confident it can be done. >> can these two parties rise above partisan politics to avoid
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the fiscal cliff? time is ticking down. as "squawk on the street" begins right now. >> good friday morning. we are live at the white house. it is a big day here in washington. of course, the president meeting with congressional leadership about the fiscal cliff right now. we are covering it from every angle today. first, a check on the marks, though, of course. the dow which some have said is well oversold and waiting for good news out of washington, down 26 points currently. s&p down almost 5 and nasdaq down almost 10. ruckus priced at $15, the top of the range and quickly fell. trading just above $14 a share. officemax surging today hoping to benefit of an ipo of boise cascade to raise up to $200 million for an ipo. officemax made an investment in the paper and pulp company. our road map for this morning, both sides of the aisle to get a deal on the fiscal
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cliff. democratic senator kent conrad will join us live for his take on the negotiations today. then the man with the direct line of strategy republicans will use to get a deal through the house, chief deputy whip and members of the ways and means committee, representative peter roskam is here and then we'll show you how you should be positioning your portfolio no matter what happens. and democratic congresswoman loretta sanchez, a member of the jec, will join us live. all that and more in the next hour live from the white house. first, though, the president making some comments on the meeting not too long ago. here's what he had to say. >> our challenge is to make sure that, you know, we are able to cooperate together, work together. find some common ground. make some tough compromises. build some consensus to do the people's business and what the folks are looking for and i think all of us agree on this is action. they want to see that we are focused on them, not focused on
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our politics here in washington. >> i want to bring in chief washington correspondent john harwood here at the north lawn with me as the negotiations continue inside. good morning once again. >> good morning. >> that piece of tape right there, how does it differ from the way the negotiations kicked off in the first attempt? >> when they tried the first time, the president was back on the heels. remember, he had just lost -- the party had just lost a tremendous defeat in the 2010 midterm elections. the republicans came in with a head of steam. the president was reluctant to go first on a deficit reduction proposal and shied away from embracing simpson-bowles. there were a series of contentious negotiations over the debt limit. those in the end worked to the benefit of the democratic party. they hurt the republican brand m m. some of those republican members were chastenned and then a presidential election winning 9 out of 10 swing states and now
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coming in with a little bit more wind at his back at this point. >> will they leverage that if they see weakness in boehner's caucus, division, the results of the election? what willingness would there be, is there to compromise on the white house's side? >> the president's got to compromise some. the issue of entitlement cuts is one the president engaged in. he was waiting for a sign that republicans were willing to give on tax increases and we are seeing some of that post-election. bob mcdonald, govern forof virginia at a meeting said, elections have consequences. the president campaigned on this. i think that is precisely the kind of leverage the president's looking for. >> you mentioned mcdonald. haley barbour said similar things and this quote of bobby jindal. we cannot be, we must not be the party that protects the rich so
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they get to keep their toys. does he speak for a significant part of the party right now? >> sure he does. there's a significant moderate group in the republican party, not huge, moderate is a relative term compared to moderates in the past. but there's a significant group that wants to make a deal. the problem is so many republicans are now scared of challenges from the right in primaries. dick lugar, the very secure senator of indiana was knocked off that way. bob bennet of utah that beat him in 2010. so the challenge is republicans who want to make a deal like boehner, can they get the flexibility? can they get the room to operate from the right within their party and they have a better chance of getting it now after a presidential election defeat than before. >> last question on the markets. we're obviously down today and been down all week as the president and speaker have said things about keeping an open mind, not closing the door the various scenarios.
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what could possibly be said today that would be market positive in your view? >> i assume that the markets want to hear constructive rhetoric from the meeting. i wouldn't expect anything to cause a big rally on wall street. and i think the declines that we have seen so far pale next to what would happen if they failed to get a deal by the time the debt limit has to go up early next year. that's where you see the croix sis in the market. >> we have some experience with that kind of thing. a lot more with john over the next hour. meantime, the cme group. rick santelli has a friday edition of the santelli exchange. good morning. >> good morning. guess what, you figure prominently in the exchange and so does mr. harwood and this button, rise above. believe me. i want to rise above politics, as well. there's a cautionary tone here and for the second time today i'm going to read article i section 7 of the constitution. it's called the origination clause. all bills for raising revenue shall originate in the house of
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representatives. okay? let's not rise above the facts here. we might have lost it and we meaning fiscal conservatism. i'm a fiscal conservative. i admit it. but the house, their majority in that regard stands a couple of seats change but it stands. and the president, he could suggest programs for taxes, and he can veto and the senate concur with the house but it's about the house of representatives. so when i hear about mandates, here's the mandate i hear. that the people that hold the purse strings is designed by the constitution, their 2010 mandate other than a couple of house switches still stands. that's the fact we can't rise above. now, let's read something that came out of that bowles-simpson interview, that wonderful interview with maria yesterday. let's throw it on the screen. this is bowles. well, they're talking about getting somewhere between 100 and 80 billion a year, taxes on the upper percent.
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it's no small number but when you consider the fact we have $1.1 trillion deficit, you can see, oh, that's not going to solve our problem. we must also reduce spending and we must put our fiscal house in order. also said yesterday is our total tax intake is $1.3 trillion. that sound familiar? not far off deficits of last several years and said something else. he said that it's possible by 2020 that just servicing the debt is going to cost $1 a year. the point is, that i'm tired of this tax bait and switch game that's going on because if everything on the fiscal side caves, okay, and, yes, i'll say caves, then what incentive is there for tax reform in 2013? that doesn't make any sense. i don't believe in politicking. i don't believe in leverage but it is what it is. am i advocating tax policy? no. but there's a right way to do
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things and too fast just like in t.a.r.p. maybe some out there or most believe t.a.r.p. was necessary. i'm not going to get in to that discussion but the discussion i'm going to get in to is how many years after t.a.r.p. are all of the issues surfacing that we didn't take care of because we rushed it through? we didn't put qualifiers on and clauses and stipulations. you know what? we can't do anything too fast. we can come up with a solution so people understand that the job's going to get done in 2013 but the end of the day if people think the fiscal conservatives in the house of representatives are the bad guys, get used to it. they're there legally and you have another couple of years to deal with them. back to you. >> rick, before i let you go, you talk about t.a.r.p. being pushed through in a hurry. we got 45 days to do this. is this enough time? >> no, we don't. listen. carl, do you think we get good tax reform and deal with the gorilla in the room that nobody's talked about today. you are talking about the 1%.
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nobody's talking about entitlements. bowles-simpsons, they're good guys. they know that's not the issue. you never fix it between december 31st. the reason it's sped up is to get the leverage. you know what? i think americans are sick of leverage. for once, do it right! >> that's a message to carry to politicians today, rick. thanks so much. rick santelli and should be here, john, at the white house. sporting goods companies flexing muscle today. let's get to brian shactman. >> he is using some wicking technology for that undershirt maybe today. a little hot. foot locker with double digit comps and sports with strong numbers. trading to the downside today and although off the lows mainly because maybe bloated inventories and nike quickly. you talked about the dividend hike. the stock split. it's obviously in play quite a bit. you see foot locker up above 4%
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and upside for nike although, carl, still underperforming for the year. down about 5%. back to you. >> thanks a lot. when we come back, we'll talk to representative peter roskam what he hopes to hear today from the leadership. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide.
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take a look at oil. we are getting news. ap reporting that the coast
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guard in new orleans is investigating a fire on an oil rig in the gulf of mexico. and dow jones is now reporting that two are dead and two are missing in an offshore platform explosion. of course, comes a day after the big settlement between the government and bp. we'll get more on this, of course, as details become available. meantime, former chief of staff for bill clinton bowles on closing bell yesterday talking about the long-term consequences of the fiscal cliff. >> if we do get our house in order, the future of america is bright and can compete with the best and brightest wherever they are. if we don't, we're on our way to becoming a second-rate power. >> joined by illinois congressman peter ross couple. he sits on the ways and means committee and joins us with john harwood and myself at the white house. congressman, good morning. >> hey, good morning, great to be with you. >> we already have the president wishing the speaker a happy birthday. i guess baby steps.
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right? how do you think the tone is shaping up today? >> i think the tone is good. look. president obama won on tuesday last. the speaker of the house congratulated him and lid out a pathway for the president to lead the nation on how to avoid the fiscal cliff and transform us in to the world class status we want to stay and maintain. so far i think the language is good. there's opportunities i think to find common ground. there's no voices on the republican side really saying let's go over this fiscal cliff. instead, let's find a remedy and move forward. >> we've already gotten a trial balloon of sorts this morning from the journal talking about various talks within the white house to revamp a sequester. as we go our way in to thanksgiving, obviously, a holiday week, a shortened week, how attuned is your radar to some of these trial balloons and which do you think are going to resonate? >> we are all very attuned to when's going on but remember the
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house of representatives already acted on these -- both of these issues relating to the fiscal cliff by arguing to extend the current rates for another year and use it as a bridge to tax reform and offered an alternative to sequestration. the debate shifted to wait for the president and what he might propose but the lion's share of the administration's argument so far has been all on the revenue side. and the president's own admission he said, look, that has to be a 3 to 1 ratio. three cuts to every $3 in cuts to every $1 in revenue. we are discussing, wringing hands, chatting, talking about revenues but the white house is not come forward with anything as it relates to the cutting side. house republicans have acted with the ryan budget in the past. have won majorities again. the second biggest house republican majority since world war ii and ready to get to work and we want to see the president lead on the spending side in particular. >> congressman, it's john
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harwood. we have heard from the speaker that republicans are open to revenues. the question is going to be, can you get enough from loopholes and deductions or does the rate have to go up at some point? the president hasn't drawn an absolute line at 39.6 but are republicans willing to let the top rate go up at all if you can't get significant amount of deductions from loopholes? >> republicans aren't convinced in the house that the best place to go or the remedy is to raise taxes, to raise these rates. there's openness as you pointed out to revenues through growth and revenues through the abolition or limitation of deductions and other loopholes. that's where the action is. look. here's where the president has an unbelievable opportunity to eclipse this entire debate and to be the transformational president that he described himself as during the -- when he was a candidate in 2008 and that's this. there is nobody that's defending the current tax code. there's no choice that's out there saying that the current
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tax code is great. instead, what the president can do is say, i don't want to litigate the old tax code. let's bridge this now and move and have a transformational tax code. the house ways and means committee under david camp's leadership as chairman is trying to work on this making the u.s. the most competitive tax jurisdiction in the world. that's an opportunity. >> i want to clarify one thing. you talked about growth. my understanding of what the speaker said is that he's willing to entertain static revenue, not just revenue of growth. do you mean to suggest something otherwise or also open to static revenue? >> yeah. static revenues is part of the conversation clearly. that's the deductions and the loophole effort but let's not underestimate the power of growth in this whole debate. and i just keep coming back. i served with president obama in the state senate in illinois and i have had a perspective and an experience with him where i have seen him move beyond traditional
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donkeys and elephants and bring winsomeness to the debate. i think the country is looking to presidential leadership. he's talked about the tax side. we need to hear her from the white house in terms of where the spending cuts are to gain a level of confidence of house republicans who also won big majorities last tuesday. >> finally, congressman, trying to draw a contrast between the negotiations and the last round. one difference is the degree to which corporate america inserted themselves in this debate, whether it's the fix the debt group, the business roundtable. do their arguments resonate at all with you, and do you think that their view has been balanced between revenue and reform? >> their view is interesting and, of course, they have influence and they need to be taken in to consideration but you know who's lost in the shuffle in this conversation? it's the small business owners largely pass throughs and llcs clearly paying at the individual rate so if the individual rate
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goes up and they're earning more than 250 then all of a sudden they're rich. that's a dry cleaner in my community having a higher tax liability and looking at very little relief under the president's current plan so, yeah, big business always has a voice. but i think it's very important that we're listening to the little manufacturers in suburban chicago that also need a voice. >> congressman, thank you for your time. >> thank you. >> interesting day shaping. when we come back, explaining the u.s. is about to repeat the economic history of the 1970ss. wouldn't that be fun? first, a sector break down. where's the performers? "squawk on the street" from the white house is back. [ male announcer ] when it comes to the financial obstacles
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well, having a ton of locations doesn't hurt. and my daughter loves the santa. oh, ah sir. that is a customer. let's not tell mom. [ male announcer ] break from the holiday stress. fedex office. welcome back. we are live at the white house. myself and john harwood as the president and congressional
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leaders beginning day one of the negotiations of the solution, potential solution to the fiscal cliff. one thing we hear from outliers, traders in some cases, there is some sort of deal that is already been agreed to in structure but it's a matter of getting each party prepared to accept it, to digest it. how likely is that? >> well, i think that is not literally true but it's not far off. in the sense that we start with a framework that the president and the house speaker came to in the summer of 2011. you also have in addition to that the different, more ambitious framework that was agreed to by the gang of six and simpson-bowles and the plans are there. the question is political will. will they be able to, democrats accept cuts in programs, medicare and social security? the president was willing to do that in the summer of 2011, although republicans want deeper cuts than that. and are republicans willing to go with tax increases?
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we heard peter roskam we're open to static growth. that's a key conceptional change since the election. where does that revenue come from? i think we are in the zone where they can reach an agreement and then the question is, can you get the votes in the house and the senate? >> you brought up the static argument weeks ago and obviously a big part of the discussion now. this idea that the president says let's put out the biggest fire first, right, the tax increases on those families making less than $250,000 at year end. >> i don't think the republicans are likely to trust him on that. if trust him means pass legislation now, extending only the tax cuts for people under 250 because that is, that is the republican leverage. remember, think eve been resisting the decoupling of rates at the top of rates in the middle and lower income groups ever since this debate has
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ripened since the president took office, so i think that's the game of chicken going on. the president's saying extend them for people under 250. or we'll go over the cliff. patty murray who's an influential senator said today we would rather go over the cliff than make a deal extending the rates and i think they mean it. >> we were talking off camera about the other chapter of today's meetings which is civil organizations meeting with the president. does he have to worry about the bis at this point? you hear people talk about legacy. how valid is that argument? >> some. he has to worry about the base and re-elected him to a second term but the president is in a very strong position as a leader of the democratic party. if he takes a position and decides that he's going to support a certain level of cuts, very difficult for democrats to resist that. some will try. but i think that he can bring democrats. the question is, can boehner and mcconnell bring republicans? >> we are on the lookout for those who are going to be
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leaving the meeting in the hour or so to come and getting a clue as today has gone, we'll bring it to you. europe is about to close. we'll get the details and how it might affect the afternoon session with the dow still in the red. what makes the sleep number store different? you walk into a conventional mattress store, it's really not about you. we have so much technology in our store to really show the customers what's going on with their bodies. you can see a little more pressure in the shoulders
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welcome to the world leader in derivatives. welcome to superderivatives. european markets are closing now. >> with that, a sea of red in
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europe. simon hobbs at post 9. simon? >> the risk aversion is growing. you see the degree of the red and quite bad in some parts. didn't mean to come in there. down over 1%. bad really throughout the session and the risk aversion grows in to the weekend. have a chart of where we have traded so far this week. bmy had an interesting note out suggesting the fiscal cliff conversation and the greek conversation more or less going to plan. the real point you moved in the week on what was happening in the gaza strip between israel and hamas and they felt that's the bigger dynamic in the week. others disagree. one thing's for sure, if you look at a longer chart, we have raised the gains of europe since september the 6th with the clear promise of the ec b that they would if required to have that unlimited buying of the bonds. still, of course, we work our
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way through disappointing corporate results. you don't know the german player and might know personal detergent or lock tight glue. they had organic growth announcement below what the market was opening for. you see that stock down 4%. after a good run. telecom lower around europe today. not paying the dividend. well, we thought they were going to spin off the fixed line business and maybe not happening and also some of the banks were lower in a general down day across europe today. there you go. the portuguese bank down 7%. carl, let me just leave you with one thought if i may as we discuss the fiscal cliff and working through what's happening in washington. deutsche banc with a note out today where it pointed out that was it not for the ability of washington to squeeze out stimulus at the feds and with the huge budget deficit that
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america is running at the moment, the economy would not have performed so well, and in fact, america stands alone with south korea and china of all the major economies around the world as a result of stimulus not to have tipped back in to a contraction at some point during the past year. in fact, they said if the america now running a european-style budget deficit it would probably be in recession, though, obviously, the fiscal cliff an important conversation. have a great weekend. back to you. >> thanks so much. i do want to draw your attention to a live shot at the white house next to the north lawn and reporters begun to gather. there's a marine guarding the door to the west wing and waiting and expecting some of the congressional leaders to come out of the meeting with the president and make a statement, perhaps. if they do we'll bring it to you when it happens. meantime, back to the nyse. bob pisani is on the floor. >> we're expecting headline risk. the president meeting with
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congressional leaders and the parties break up and everybody comes out with a spin on when's going on. a lot of things can happen right now. the dow industrials, not far from the lows of the day but a weak opening and didn't have a lot to do with the fiscal cliff but an extraordinary industrial production number and the comments right in the top paragraph, out of the fed, interesting. i think important for people the look at. industrial production was much weaker than anticipated but the fed came out with a statement at the top saying sandy reduced industrial production output by nearly 1 percentage point so the bottom line is the industrial production would have been above expectations were it not for sandy. and a lot of people took a while for them to read that. i think that helped turn the markets around a little bit right now. elsewhere, the sectors hit hard by concerns of the fiscal cliff on the downside today. it's been an ugly week for
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industrial trust. down 6% since the election. the association met this week in san diego. had an annual meeting and my understanding is fairly downbeat. a little bit of concern. even though the fundamentals of real estate doing well. supply is muted. capital is cheap. in theory, not a bad time to be in the real estate business. utilities down more than 6%. they were hurt by sandy a little bit. the northeast ones. there's a one-month chart. finally today, a positive print on the overall utilities but a rocky road for them and same situation with telecom. they're the most affected by the fiscal cliff issues. telecom down about 5.5% since the election began and down another 1% today. carl, back to you. >> all right. bob, thanks so much for that. at least one consumer still has some money. video gamers. get to brian shactman at headquarters with that story. >> unbelievable numbers here. take a look at how it's trading.
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strongly to the upside on huge volume. "call of duty" $500 million sell through in the first 24 hours. microsoft released "halo 4" a week ago with $220 million in the first day. double that. huge numbers. raised the guidance last week based on expectations. trading 8 million shares a day. already up to 11. back to you. >> thanks a lot. let's get to rick santelli talking the fiscal cliff with a special guest at the cme. hey, rick. >> i am, indeed. before the special guest, you know in one of the last interviews anna schwartz world famous economist talked about that in the great depression we did have a liquidity crisis. a run on banks but she doesn't think or didn't think that we have a liquidity crisis today which is the cornerstone of many of the fed's programs and ben bernanke is an expert on the great depression but in her words problem this time is toxic
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balance sheets and mistrusted banks. we have our leading authority, one of my favorite authors. amity shlaes and the book is, well, "the forgotten man." a new history of the forgotten man. welcome, amity. can you weigh in on what i paraphrased? >> she was afraid dumping money was not the solution in a downturn always and more than fiscal stimulus didn't work. now what we're looking at, i mean, you raise the parallel to the great depression. what we're looking at is whether we're repeating 1936 and '37. after a democrat in that instance franklin roosevelt was re-elected and the market crashed. i was listening with great interest because industrial production then as today was the signal number that went down so fast. in '37, the depression within the depression leading the unemployment in to the higher
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teens. the question is whether you have a repeat of that, now sir. >> being the expert on that particular time, and in the book obviously great book, you pretty much think that fdr's policies along with the hoover's policies really were the wrong policies. nour director of the 4% growth project. what are some suggestions that you would put forth to see a handle on gdp? >> yes, that's right. you kindly flashed our book. it has to do with optimism and thinking about what makes people want to work. the problem recently has been the emphasis on blaming people, assigning blame, getting certain parties and that was very, very familiar in the 1930, too. they said bring down the rich, basically. you have to make the rich want to create jobs. that was how you begin to get out of a depression. one of the reasons they got out of the depression was as the war
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came, franklin roosevelt needed them to help them arm so he stopped attacking them. if you don't know what the government will do, the health care legislation is our example now. then it was the labor law. and then you freeze up and companies freeze up and park money. very familiar scenario that we're seeing now. for growth, taxes matter the most. that's what we say in the 4% book. >> well, amity, it's been an absolute pleasure. and i'm really looking forward to the new book on president coolidge. >> the president saved in taxes. thank you. >> thank you. carl, back to you. >> anyone who hasn't read "the forgotten man" needs to. more from the white house when we come back. they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries.
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♪ make it worth watching. ♪ the new 2013 lexus ls. an entirely new pursuit. here's speaker boehner addressing the press outside the west wing. >> i outlined a framework that deals with reforming our tax code and reforming our spending. i believe that the framework that i have outlined in our meeting today is consistent with the president's call for a fair and balanced approach. to show our seriousness, we have put revenue on the table. as long as it's a company by significant spending cuts. and while we're going to continue to have revenue on the table, it's going to be
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incumbent for my colleagues to show the american people that we're serious about cutting spending and solving our fiscal dilemma. i believe that we can do this and avert the fiscal cliff that's right in front of us today. >> this isn't the first time we have dealt with these issues. we feel we understand what the problem is. and we felt very -- i feel very good about what we were able to talk about in there. we have the cornerstones of being able to work something out. we're both going to have to give up some of the things that we know are a problem. and so, it's like when we arrive at a point where we all know something has to be done. there is no more let's do it some other time. we're going to do it now. i think we feel very comfortable with each other and this isn't something we're going to wait until the last day of december
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to get it done. we have a plan. we're going to move forward on it. and we're going to work during the thanksgiving recess. we'll meet with the president when we come back the first week. at least that's as i understand it. so i it was a very constructive meeting. i feel very good about what we were able to talk about. mitch? >> thank you. it was a very constructive meeting. it was -- we had a recognition that every person in america knows that we must reach agreement. we had -- the speaker spoke about a framework going in to next year. i was focusing on how we send a message of confidence to consumers, to the markets in the short run, too. that is to say that we should have a goal in terms of how much deficit reduction. we should have a deadline before christmas. we should show some milestones of success so that confidence
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can build as we reach our solution because if we do not reach agreement, not only will we miss the opportunity for doing something good for our economy and lifting the spirits and the confidence in our country, we will have an economic downturn that must be avoided. we understand our responsibility there. we understand that it has to be about cuts. it has to be about revenue. it has to be about growth. it has to be about the future. so, as we cut investments and as we talk about revenue, we have to do so in a way that promotes growth and supports the future. it was good. i feel confident that a solution may be in sight. mitch? >> yeah. i could only echo the observations of the other leaders that it was a constructive meeting. we all understand that -- where we are. i can say on the part of my
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members that we fully understand that you can't save the country until you have entitlement programs that fit the demographics of the changing america and the coming years. we're prepared to put revenue on the table providing we fix the real problem. even though most of my members i think without exception believe that we are in the dilemma not because we tax too little but spend too much. another observation on another issue. i had a chance to talk to the president yesterday about the trip to burma. a country i have had a long standing interest in over 20 years. i want to commend him to go. i think it's an important step for him to take. >> thank you, everybody. >> and looks like they'll be no q & a today but the markets trying to build some momentum. the dow briefly growing in 0 the green and talking about cornerstones of putting
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something today. addressing the markets specifically should be milestones, open communication, a deadline before christmas and in her view. what just happened? >> i think that's as positive a readout to get from congressional leaders. first of all, there was the subtle stuff and the explicit stuff. they introduced each other by their first names. very congeal yal but nancy pelosi saying we have to have cuts. >> about as good as you can expect at an hour or two. >> especially talking about the possibility of getting this done, not at the very last minute but with some room to spare. i don't know what getting it done but it means having all of the elements of a deal completed or whether it means a mechanism or getting it done in the early part of next year but i think every sign that we just got out of the meeting was positive. >> let's bring in senator kent
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conrad of north dakota. had a busy day already. thank you for being with us. >> you bet. >> i'm sure you were able to hear senator reid say we won't wait until the last day of december, working through the thanksgiving recess. do you agree with john that this was a good first step? >> extremely positive. i'm even more encouraged. you know, i felt all along there's a good chance to arrive at a framework agreement in this lame duck session, lay out the size of the package, how it would be distributed to how much to cut in spending and raise in revenue. lay all that out before the end of the year. and have a down payment so that everybody understood we were serious about this. and i think all of that can happen. >> senator, let me ask you about the revenue side of the equation. republicans have said they're open to revenue. not just dynamically scored revenue but static revenue. through loopholes and
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exclusions. they're resisting an increase in the top rate. i'm wondering what you think happens if as the president said you find that you can't get enough from loopholes and deducti deductions. do you see republicans giving on the top rate and goes up somewhat or do you see another source of revenue coming in aside from the loopholes and exclusions? >> look. what's very clear and i have, you know, spent five years working on these issues since judd gregg and i proposed a presidential commission to close this gap, when's very clear from the numbers is you can't do it without raising rates at least on capital gains and dividends. that's very clear. so you do have to have rate increases. you could do it mathematically by not going up on the top rate, that is from 35% to 39.6%. but that presents some very difficult challenges in terms of the so-called tax expenditures
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because if you don't go up on the top rate, you have to go deeper in to tax expenditures. you start affecting very popular things like home mortgage deduction, like the health care deduction. like other things that are popular with the american people. what is absolutely clear is you do have to go up on rates on capital gains and dividends because as you know right now they're taxed at 15%. everybody else -- all other income, earned income is taxed at 35%. >> senator, is that where you think the sweet spot in the negotiations might be, that is, you sharply limit deductions for people at the top end, keep the top rate at 35 but have the rates go up? >> that -- i'm just saying this. that could work mathematically. whether it works politically, because of the tax expenditures
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you then have to alter, is a separate question. but i think the president has been entirely correct to say, you've got to negotiate from that 39.6% rate. because believe me it is hard to make this all work. and so, you have to begin the negotiations at that 39.6% top rate to really force people to deal with reality. >> senator, the speaker just talked about the other side. it's incumbent upon them to talk about reforms and entitlements just as much as they talk about revenue. i wonder if the conversation this week has been skewed to the revenue side and whether we're not talking about some of the more painful things that eventually have to be dealt with. >> well, look. revenue is the issue. i have been involved as you know in intensive negotiations with the republicans in bowles-simpson, the group of six, the group of eight,
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hundreds an hundreds of hours and at the end of the day the big difference is on revenue. republicans until now have absolutely been opposed to any change in revenue. now that's starting to change. so i commend them for it because that's reality. look, revenue is almost at a 60-year low in this country as measured as a share of our gross domestic product. on the entitlement side, democrats expressed including the negotiations last year a willingness to deal with the health care accounts if there was a revenue component. but so far, until now, republicans have resisted that component. i think that's why it is so much emphasis this week. >> senator, following on carl's question, you and i talked in the summer right after mitt romney had selected paul ryan as his vice presidential running
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mate and ryan proposed farther reaching proposals in medicare than democrats were willing to support. what do you think is the effect of the candidacy on where we pick up the negotiations now? >> i don't think it's had much effect. really. other than really extreme proposal that congressman ryan had in his first budget has been pretty much rejected by even his own party. i don't think anybody is going to accept shredding medicare in order to get an agreement. that cannot be the answer. >> senator, one last question here. the dow is up 30 points. when these negotiations began, they were down 40, 50 points. pelosi makes a point of potentially creating a method to create to the market how negotiations are going without negotiating in public. is there a way to do that
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between now and year end? >> yeah. that's to get a result. you know? at the end of the day, what really has to happen is that we agree on a down payment, something that would be put in place right away. and we agree on a framework so that we know how much we're gong to save. i'm in favor of $5 trillion. and to do it how it's to be done. how much is revenue? how much is spending? what are the categories of spending with precision. and then to work out the details how those goals are to be met over the first six months of next year. that is a practical and responsible way to proceed. >> well, we got chapter 1 under the belts. senator, appreciate your time as always. >> you bet. >> senator kent conrad from the hill. a lot more when we come back. so anyway, i've been to a lot of places.
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welcome back. new orleans coast guard investigating a fire on an oil rig in the gull of mention co. sharon? >> cnbc learned that the fires are extinguished. that explosion in the shallow
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waters 25 miles off the louisiana coast near grand isle, louisiana. and this explosion occurred on a shallowwater rig by black elk energy. apparently four people medevacked from the location and two others are missing and not accounted for. the coast guard continues to investigate an bringing viewers up to date on when's happening there in the shallow waters in the gulf of mexico. we did see oil prices react immediately, spiking more than $1.50 on the news and then giving back the gains. we are seeing a slight recovery and in line with what we're seeing in equities, as well. back to you. >> thank you so much. sharon epperson watching that breaking story from the nymex. to debrief the last hour, republicans have put revenue on the table and i guess you could argue that's a big change from two years ago, even a year ago. i wonder if you think we have made -- there's been a little more progress than we're giving
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the situation credit for given the fact we're so myopic about the day-to-day negotiations. >> i absolutely do. this is building over time, since the collapse of those grand bargain negotiations in the summer of 2011. over the summer, for example, chuck grass ri of iowa long-time member of the finance committee said we need revenue on the table. now that you have had an election result, democrats gained seats in the senate, they gained seats in the house and republicans have the majority, you are seeing republicans embrace that reality that the president campaigned on this. they want to be seen as cooperating with him. and it's a very positive environment at this moment but the hard part is not getting the leaders to negotiate. they can do it easily. >> i asked you this morning how this would all end. your guess at the time to get done but maybe not before the end of the year. is that intact after what you just heard? >> i think so. i wasn't quite sure what harry reid was saying saying we won't
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wait until the end, whether he was talking about a bridge or a framework to the early part of next year or getting it all done. in's highly ambitious and skeptical to get it done. i think that's what we're looking at is a framework to get filled in early next year but i suppose it's possible not to be optimistic enough. >> we've been burned before. of the four people that spoke at the mike are phones, when's the key player aside from the speaker himself? >> i think the speaker. i think it's very clearly the speaker and the house republican caucus. constructive that nancy pelosi said cuts on the table, growth is something to pay attention to. >> she'll deliver votes from the left, yes? >> yes. is there a deal with half the republican caucus or a we pond rans? >> i appreciate your sharing your insight with us. important day and the

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